Up to 10,000 people are likely to come forward to declare a potential tax liability in relation to certain life assurance products as a major investigation by the Revenue Commissioners gets under way. Emmet Oliver reports.
Today is the deadline for preliminary disclosures. More than 2,500 people have already made a preliminary or "qualifying" disclosure, but this figure is likely to be significantly exceeded. The Revenue Commissioners believe thousands of people over the last 25 years may have channelled untaxed income or "hot money" through various life assurance products. Some estimates have put the amount of tax, interest and penalties likely to be paid back to the State at €1 billion.
Tax experts indicated yesterday that 10,000 people was the most likely figure based on previous Revenue investigations. For example, the investigation into bogus non-resident accounts prompted 11,000 people to come forward, while the investigation into offshore assets has generated 14,000 case files. The Revenue does not expect to have firm figures on the numbers coming forward until later this week. Ciaran Medlar, a tax partner with BDO Simpson Xavier, said that estimating the number of people likely to come forward was difficult at this point, but based on previous trends, as many as 10,000 could be expected.
He said the vast bulk of disclosures in these type of investigations usually came in on the last day. He said his firm was being contacted by a large number of people, although many of them were just making sure they had no liability.
Those coming forward today must make what is known as a "qualifying disclosure". This is a very preliminary disclosure which may, or may not, lead to tax being repaid.
Once these disclosures are submitted the person has until July 22nd to make a full disclosure and submit payment of outstanding taxes, penalties and interest.
The benefit of coming forward at this point, claims the Revenue, is that people will be able to benefit from reduced penalties and will not have their names disclosed publicly. They will also not face a criminal prosecution.
The initial period of the Revenue investigation is likely to impact on more affluent people. This is because it will target those who invested €20,000 or more in their life assurance products.
The Revenue Commissioners emphasised last night that the investigation did not apply to people who took out life assurance products with money that was disclosed at the time. One example might be a lump sum paid out on retirement.
The Revenue Commissioners have set up a helpline in Dublin for anyone with queries: 01-6474818
